Washington: US President Donald Trump on Tuesday announced a pause on the planned 50% US tariff on Canadian imports worth around $20 billion, just hours before the measures were due to take effect.
Trump made the announcement on his social media platform, saying the pause followed a last-minute agreement between the United States and Canada, subject to the finalisation of documents.
The decision gives both countries additional time for negotiations and temporarily eases tensions between the two longstanding allies.
Trump made the announcement less than two hours before the 12:01 am Wednesday deadline, saying the tariffs would be paused for three days following the agreement.
The proposed tariffs were expected to affect around 5% of the goods Canada exports to the US each year, ranging from products such as hockey sticks to tongue depressors.
Canada had threatened retaliation
The political impact of the proposed tariffs was expected to be greater than their immediate economic impact. Canada had threatened to respond to any new US tariffs with measures of its own, raising concerns about an escalating trade dispute between the two countries.
The US and Canada traded around $880 billion worth of goods and services last year, highlighting the scale of their economic relationship.
